Page:United States Statutes at Large Volume 100 Part 3.djvu/687

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2495

determined by reducing the nontaxable benefits of highly compensated employees (beginning with the employees with the greatest nontaxable benefits) until such plan would not be treated as a discriminatory employee benefit plan if such reduced benefits were taken into account. "(3) PLANS OF SAME TYPE.—In computing the excess benefit

with respect to any benefit, there shall be taken into account all plans of the employer of the same type. "(4) NONTAXABLE BENEFITS.—For purposes of this subsection, the term 'nontaxable benefit' means any benefit provided under a plan to which this section applies which (without regard to subsection (a)(1)) is excludable from gross income under this chapter. "(c) DISCRIMINATORY EMPLOYEE BENEFIT PLAN.—For purposes of

this section, the term 'discriminatory employee benefit plan' means any statutory employee benefit plan unless such plan meets the— "(1) eligibility requirements of subsection (d), and "(2) benefit requirements of subsection (e). "(d) ELIGIBILITY REQUIREMENTS.—

"(1) IN GENERAL.—A plan meets the eligibility requirements of this subsection for any plan year if— "(A) at least 90 percent of all employees who are not highly compensated employees— "(i) are eligible to participate in such plan (or in any other plan of the employer of the same type), and "(ii) would (if they participated) have available under such plans an employer-provided benefit which is at least 50 percent of the largest employer-provided benefit available under all such plans of the employer to any highly compensated employee, >i "(B) at least 50 percent of the employees eligible to participate in such plan are not highly compensated employees, and "(C) such plan does not contain any provision relating to eligibility to participate which (by its terms or otherwise) discriminates in favor of highly compensated employees. "(2) ALTERNATIVE ELIGIBILITY PERCENTAGE TEST.—A plan shall be treated as meeting the requirements of paragraph (1)(B) if— "(A) the percentage determined by dividing the number > of highly compensated employees eligible to participate in the plan by the total number of highly compensated employees, does not exceed "(B) the percentage similarly determined with'riespect to employees who are not highly compensated employees. "(e) BENEFIT REQUIREMENTS.—

"(1) IN GENERAL.—A plan meets the benefit requirements of this subsection for any plan year if the average employerprovided benefit received by employees other than highly compensated employees under all plans of the employer of the same type is at least 75 percent of the average employer-provided benefit received by highly compensated employees under all plans of the employer of the same type. "(2) AVERAGE EMPLOYER-PROVIDED BENEFIT.—For purposes of

this subsection, the term 'average employer-provided benefit' means, with respect to highly compensated employees, an amount equal to—

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